This Week Marks An Unhappy Anniversary For Homeowners

John Kerr Communications Fellow, Institute for Justice
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There’s nothing there on the land where a tightly knit neighborhood of homes once stood.

No luxury condos, no five-star hotel, no high-end retail, no pedestrian riverwalk or new marina. None of this. Just 90 acres of vacant land, a symbolic monument to bureaucratic hubris and judicial imperialism.

It was nine years ago this week that the U.S. Supreme Court issued its decision in Kelo v. City of New London, ruling 5-4 that the Connecticut town could confiscate dozens of private residences in pursuit of a grandiose “economic development” model that might produce more tax dollars than the existing homes.

The Fifth Amendment’s Takings Clause prohibits the government from seizing private property “for public use without just compensation.” The term “public use” has traditionally been interpreted to mean a road, military base, school and the like. But in Kelo, the majority justices — relying on two precedents — sanctioned the use of eminent domain to forcibly convey property from one private owner to another.

Writing for the court in 2005, Justice John Paul Stevens described the “comprehensive character” of New London’s “carefully formulated” economic revitalization plan and the “thorough deliberation that preceded its adoption” as evidence that the land grab “unquestionably serves a public purpose.”

The homeowners who wouldn’t sell — including Susette Kelo, who had lived in her 115-year-old house since 1997 — stood in the way of New London’s elaborate blueprint to transform the city’s Fort Trumball area near the Thames River into an “urban village,” complete with restaurants, lodging, shops and a walkway near the water. Coupled with a package of financial incentives the city had used to lure the drug conglomerate Pfizer to build a nearby office complex for its research division, the redevelopment scheme was to be the catalyst for New London’s rebirth. Local officials mumbled the usual platitudes about “creating jobs” and “generating tax revenue.”

But that was then and this is now.

Nearly a decade after the Supreme Court allowed New London and its redevelopment agency to bulldoze those homes in the name of economic salvation, the promises have been unmasked as empty speculation. Construction financing for the project dried up when the housing market collapsed in 2008. A year later, Pfizer pulled out, taking 1,400 jobs along with it and leaving its eight-year-old office building vacant. Efforts in recent years to resuscitate the development plans have failed to attract the necessary financial support.

Where rows of homes once formed a working-class neighborhood, a barren field now dominates.

Beth Sabilia, the New London mayor when the eminent domain dispute played out, has expressed regret over the controversy. “Yes, the city of New London won” in court, she said in 2009, Jerome Tuccille reported at Examiner.com. “But no one in the city of New London really won.”

The same can be said for the rest of the country.

While outrage over Kelo did lead 44 states to reform their laws or their state constitution to impose additional restrictions on the use of eminent domain for commercial and economic development, the court’s weakening of the Takings Clause remains an invitation for abuse — and examples abound from coast to coast. In recent years, municipalities in Illinois, New Jersey, New York, Louisiana and Colorado have pushed forward with commercial-use takings. Meanwhile, a pending ballot question in California would expand the state’s powers to raze private homes and businesses and turn the land over to developers.

None of this comes as any surprise to the dissenting justices.

“Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner,” wrote Justice Sandra Day O’Connor for the minority, later adding that the decision “wash[es] out any distinction between private and public use of property and thereby effectively [deletes] the words ‘for public use’ from the Takings Clause of the Fifth Amendment … The government now has license to transfer property from those with fewer resources to those with more,” she concluded. “The Founders cannot have intended this perverse result.”

In a separate dissent, Justice Clarence Thomas called the decision “far-reaching and dangerous.” He went on to observe, “Something has gone seriously awry with this Court’s interpretation with the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not.”

The home of Ms. Kelo, a nurse, was spared demolition when she sold it in 2008 for $1 to a local opponent of the seizure who then moved the pink structure a few miles away. There it sits today, an unhappy reminder of the dangers of unchecked state power— and the consequences of judicial indifference to it.

Just this week, two movie producers announced they would bring a feature film on the Kelo case to theaters across the nation next year. Art will once again imitate life, and one can only hope that the public and politicians will learn the lesson that eminent domain for private gain is not only wrong, but it simply doesn’t work. 

John Kerr is a communications fellow with the Institute for Justice, a public-interest law firm in Arlington, Va., which litigated on behalf of the Kelo homeowners.